Your reply makes no sense. Throughout the history of commerce, there have always been middlemen. Apple is no different. They provide the opportunity for you to buy, they get a cut. You don't want to use them, then to go the website. It's as simple as that.

I guess I'm a bit tainted as a shareholder. Anytime I see Apple doing well to make a profit, I'm good, and if they have the market power to outgun Amazon, Sony or whoever, well, then more power to them. They've earned it.

You're wrong if you believe that Apple should be adhering to some sort of social propriety of yours. What? They should make business easy for Amazon or Sony? Because why? No shrewd business would ever do that. If you don't understand that, then you don't understand business.

They're in this business to make money. Get over it.

As a shareholder you should be more concerned with hardware . Apple isn't a middleman which provides any value to the apps on the iPad. Now, of course, the cult is going to respond with the claim that the iPad - it's very existence - is a platform, a store. If so, why cant windows charge for all iTunes transactions?

Believe it or not Amazon not only do their own hosting, they could, if allowed do their own IAP. Apple is demanding rent for being on the iPad. It's also a monopolistic ploy, no way would they even contemplate this were they at 5% of the tablet market.

Apple provides the platform and the experience for the publishers to promote their subscription. In some ways we can equate this to the paper the magazine is printed on. Magazine publishers have to pay the paper suppliers. The price may be higher on the iOS but it is a similar analogy in my mind.

I won't read all 70+ comments so someone may have said this before, but I don't see how it's unfair for Apple to take 30% of the cut. They run iTunes, they run the App store, they set up the dev program for the app to exist, they have the payment system in place, and they make and sell the devices that people are using to see the publishers content. Not to mention that they develop the software for those devices and keep them updated. If publishers don't want to give them 30% then they can do all of those things themselves.

I laugh at the publishers... 30% is nothing for the exposure and ease that apple allows for customers. 1-click and done. No signing up at 10 different sites with your credit card info. Apple have set-up a system that is so superior to anyone else in the world. People want easy and quick. Joe blow doesn't care if the New York Times or Cosmo magazine makes 100% of the profit, they just want to the end product at their finger tips.

This is the same BS the record industry has complained about for years. Yet iTunes has allowed for Hundreds of millions of dollars that artists and/or distributors would not have got otherwise. All that and a virtual CD is cheaper than the CD from a store.

I won't read all 70+ comments so someone may have said this before, but I don't see how it's unfair for Apple to take 30% of the cut. They run iTunes, they run the App store, they set up the dev program for the app to exist, they have the payment system in place, and they make and sell the devices that people are using to see the publishers content. Not to mention that they develop the software for those devices and keep them updated. If publishers don't want to give them 30% then they can do all of those things themselves.

Should Apple give Windows 30% of all sales of music and content on iTunes? If not, why not?

I have an idea, why not let Microsoft charge one percent of the total amount of every invoice written with Word? Or rather written on a Windows PC. That would be a huge untapped revenue pool for Microsoft.

Im in the publishing industry and this actually isn't that bad a deal. The important line in the article was, "Apple also revealed that [pblishers who use its subscription service in their app can also leverage other methods for acquiring digital subscribers outside of the app. For example, publishers can sell digital subscriptions on their web sites, or can choose to provide free access to existing subscribers.".

If I can provide a free digital copy to my current subscribers, great! When their subscription runs out, they can renew the easy way through Apple. Apple keeps 30%, but I'm not going to send paper copies to people who renew that way. The money I save in postage alone makes up most of that. And if people move to digital en mass, my printing costs drop too. All the while my circulation (and with that, ad rates) would stay the same. Apple is taking the money from my printer and the post office, not me.

Once again it seems that everyone has forgotten that the App Store does not operate under a fee for services model, it operates under a revenue sharing model. All the criticisms related to where content is hosted/delivered from and based on whether 30% is "fair" for what Apple does in one of these transactions are entirely irrelevant, beside the point, moot.

Publishers and developers distributing free or cheap apps that are worthless without content, and then selling that content outside the App Store, are cheating the system to avoid the revenue sharing that they agreed to in order to participate in the App Store ecosystem. Not offering in-app purchasing for these items is exactly equivalent to renting a store in a mall where you don't pay rent but agree to share a percentage of your sales with the mall operator, and then telling your customers to go around to the back door and buy it from the parking lot so you don't have to ring it up through the cash register supplied by the mall owner. Apple is just saying, "Hey, you can sell stuff in the parking lot, but I'm not going to allow you to not use the register at all, and you can't put a sign in your store saying, 'cheaper out back'."

Will Amazon stay on the platform or not. I say no, because their margins are wiped out. It's slightly different for The Economist - since the cost of any extra content bought is free, the money is sunk in the original print edition. But for amazon each book bought each purchased e-book means a payment to the owner, and added to the costs of production and maintenance, that makes the model unviable.

so major credit cards charge 1.5 - 2.7% for a transaction fee, processing all of the data.

...Apple has decided that they want 30%, AND won't allow publishers to offer a lower price anywhere outside of their store? ridiculous

i should be able to subscribe to a publishers content through the convenience of the app store for a slight upcharge, and still be able to get that subscription directly from the publisher for slightly less.

I'm not trying to dismiss your argument, but I think the problem with arguments like this is that we are all talking as if the paper magazine subscription and the digital magazine subscription are equivalent, and that the customer base is also the same.

I don't see that this is necessarily true at all. The paper magazines will end up being subscribed to on the web sites of the publishers or through the old fashioned mail in cards, and the digital stuff will all be in the iOS store.

We are all talking like Apple is taking a piece of the publishers digital subscription pie, when in fact the publishers have no pie. Apple is more or less creating the whole pie here and providing the shop window to display it as well. With few exceptions there were no digital magazines before this and what there was had such low volume it's not right to compare the two.

I disagree. 30% for nothing more than processing the payment and passing the data? If the person purchased within the app, the iTunes UI/browser wasn't used. Apple didn't perform any marketing to get the attention of the subscriber since they purchased it in, not via the iTunes UI.

How many millions of dollars does Apple spend to develop and maintain the iOS platform and devices? Without the device and iOS there is no marketplace. Apple is providing them a growing marketplace with millions of customers. Why is Apple evil for wanting a percentage for providing publishers a distribution channel and other retailers such as Amazon and BN are not?

Once again it seems that everyone has forgotten that the App Store does not operate under a fee for services model, it operates under a revenue sharing model. All the criticisms related to where content is hosted/delivered from and based on whether 30% is "fair" for what Apple does in one of these transactions are entirely irrelevant, beside the point, moot.

Publishers and developers distributing free or cheap apps that are worthless without content, and then selling that content outside the App Store, are cheating the system to avoid the revenue sharing that they agreed to in order to participate in the App Store ecosystem. Not offering in-app purchasing for these items is exactly equivalent to renting a store in a mall where you don't pay rent but agree to share a percentage of your sales with the mall operator, and then telling your customers to go around to the back door and buy it from the parking lot so you don't have to ring it up through the cash register supplied by the mall owner. Apple is just saying, "Hey, you can sell stuff in the parking lot, but I'm not going to allow you to not use the register at all, and you can't put a sign in your store saying, 'cheaper out back'."

There is nothing in the App Store guidelines about revenue sharing. There is no legal text on the issue. You have made up your own excuse.

The iPad is not a store, it is a device running an OS. I own it, not Apple. And if Kindle moves off the platform, then I lose my owned content on that platform, so I move to Android.

Should Apple give Windows 30% of all sales of music and content on iTunes? If not, why not?

I don't even know if this merits a response. Microsoft does get paid for every windows version of itunes, can you run windows itunes without windows? Is windows free? Yes, there are plenty of services that charge per use. And yes any company setting them up has the right to set up their terms. If microsoft wanted to charge per document created they could. Some people would love this. I for one, only need microsoft office once or twice a year, but then i really need it. If i paid per document that would be great....of course, i don't think it would be a good business decision. In this case, i think Apple is being smart with their policies.

How many millions of dollars does Apple spend to develop and maintain the iOS platform and devices? Without the device and iOS there is no marketplace. Apple is providing them a growing marketplace with millions of customers. Why is Apple evil for wanting a percentage for providing publishers a distribution channel and other retailers such as Amazon and BN are not?

So why cant MS charge for each iTunes transaction on WIndows? The iPad is not an e-reader exclusively, it is a mobile computer tablet.

I am betting 0%. I have to educate my clients all the time on why I charge what I charge. They then shake their heads and say, oh, I never realized that. lol Some of it just apple haters who will take every opportunity to spew about every little thing apples does. Most just do not understand what it takes to run a business. I have multiple costs I have to pay even before I walk out my door. I would gladly give up 30% to have access to millions of potential clients in a system I do not have to spend a dime to set up nor maintain. Getting new clients is the hardest part of doing business and usually takes up a great deal of time and money. A greater client base means more work/products sold and makes every penny of advertising pay off.

I don't even know if this merits a response. Microsoft does get paid for every windows version of itunes, can you run windows itunes without windows? Is windows free? Yes, there are plenty of services that charge per use.

Wait now.

Apparently Apple is benefiting Windows by putting iTunes on Windows, when Windows is supplying the platform.

Apparantly, Apple is benefiting Amazon when Amazon puts the Kindle app ( for free) on the iPad were APple is supplying the platform.

Two different answers.

Quote:

And yes any company setting them up has the right to set up their terms. If microsoft wanted to charge per document created they could. Some people would love this. I for one, only need microsoft office once or twice a year, but then i really need it. If i paid per document that would be great....of course, i don't think it would be a good business decision. In this case, i think Apple is being smart with their policies.

Um, right, but not the same since MS also makes Word. The equivalent would be an Apple application, downloadable for free, which buys in-app content using it's own model. Should Windows - which provides the platform - take 30%, or not?

As a shareholder you should be more concerned with hardware . Apple isn't a middleman which provides any value to the apps on the iPad. Now, of course, the cult is going to respond with the claim that the iPad - it's very existence - is a platform, a store. If so, why cant windows charge for all iTunes transactions?

Believe it or not Amazon not only do their own hosting, they could, if allowed do their own IAP. Apple is demanding rent for being on the iPad. It's also a monopolistic ploy, no way would they even contemplate this were they at 5% of the tablet market.

Lol... Apple and the App Store allow all this to happen. Don't offer your product to the App Store and see where you are in 5yrs? Its up to the industries to adapt to what the market wants... Explain how its monopolistic? itunes and the app store are glorified store fronts and they can sell whatever they want just like Walmart or the mom and pop store down the street?

Will Amazon stay on the platform or not. I say no, because their margins are wiped out. It's slightly different for The Economist - since the cost of any extra content bought is free, the money is sunk in the original print edition. But for amazon each book bought each purchased e-book means a payment to the owner, and added to the costs of production and maintenance, that makes the model unviable.

For $9.99 ebook Amazon will take $7 after Apple's cut. Amazon will end up with $2.10 (vs $2.99 for purchases directly through Amazon) and the publishers will get $4.90 (vs $7.00). The cost of maintenance and production is the same whether you sell one book or 1 million book. However, selling X + Y number of ebooks is better than selling X along even if the revenues from Y is 30% less. Business decisions are and should not be based on emotions.

Dont get me wrong forcing one price for site and app is fair (though publishers lose close to 30% on this deal). However not allowing a link to the site within the app is a bit of a duche move. It is already was easier to just do an in app purchase, but if I want to go through the trouble of asking people to go on the site and sign up there with a small screen browser I should be allowed to do that.

They should have forced publishers to just give an option. If you want to you can click here for in app purchase, if you want to go through our site and sign up to support the publisher. The split will be 70 - 30 where apple keeps 30% of 70% of the people, while loyal fans (30%) go to the publisher and it keeps close to 100%.

I am betting 0%. I have to educate my clients all the time on why I charge what I charge. They then shake their heads and say, oh, I never realized that. lol Some of it just apple haters who will take every opportunity to spew about every little thing apples does. Most just do not understand what it takes to run a business. I have multiple costs I have to pay even before I walk out my door. I would gladly give up 30% to have access to millions of potential clients in a system I do not have to spend a dime to set up nor maintain. Getting new clients is the hardest part of doing business and usually takes up a great deal of time and money. A greater client base means more work/products sold and makes every penny of advertising pay off.

Agreed! After having had success in the entertainment/arts field in conjunction with new media, I entered into the consulting world a little over a year ago. I've worked with many successful retail stores, some who have margins that range anywhere from 40-55%.

To someone who doesn't understand anything about business, this goes through their mind:

"OMG! What a rip off!! That's disgusting how much they mark up!!!!"

To someone who DOES understand how business works, this goes through their mind:

As a regular consumer/apple fan I was initially disappointed about the superficially "unfair" policy of charging 30% for "just the processing fee", until I made the analogy comparing iTunes to any other brick and mortar store. The store spends the capital to provide a place where customers can see the products. The supplier, in turn, is not going to punish it's distributor by under undercutting it's prices. Take apple for example. It charges the same price on it's website for a computer (or higher) as best buy, wallmart, AMAZON, or others. Apple makes less profit off of those products, but that's the price apple pays to extend it's distribution. The processing services are a minor part of the picture.

For $9.99 ebook Amazon will take $7 after Apple's cut. Amazon will end up with $2.10 (vs $2.99 for purchases directly through Amazon) and the publishers will get $4.90 (vs $7.00). The cost of maintenance and production is the same whether you sell one book or 1 million book. However, selling X + Y number of ebooks is better than selling X along even if the revenues from Y is 30% less.

This is assuming that Amazon passes on the 30% to the owners of the books. They wont and cant do that. You are assuming some nonsensical figures - apparantly a 100% margin on e-books ( but Amazons total margins are 5%).

If a book costs Amazon $5. ( All costs including hosting etc.). And if they dont sell that book for more than a 43% margin ( $7.15) the profit is lost. If they sell at a 50% margin profit is reduced by 90%. You can do the rest of the math yourselves.

Similarly this model affects Skype, Audible, Spotify, and all other content providers who will have much more room to make money on Android.

so major credit cards charge 1.5 - 2.7% for a transaction fee, processing all of the data.

...Apple has decided that they want 30%, AND won't allow publishers to offer a lower price anywhere outside of their store? ridiculous

i should be able to subscribe to a publishers content through the convenience of the app store for a slight upcharge, and still be able to get that subscription directly from the publisher for slightly less.

Credit cards don't offer all of those products for sale, nor do they advertise any of them. They just process the transaction. Apple has a store that all the p,rodents are on, described, sold, and that also hosts reviews and other information. It's not the same as a credit card transaction. People here should understand that.

And they do host much of what they sell, or give away for free. That should be understood as well. Anyone who says that they don't host any of the things they sell, or give away are living in their own worlds. Will they host these subs? In some cases.

What apple is doi g here seems pretty fair, and much better than I was thinking it would be. Apple will be listing and hosting subs that are gotten from their store. They won't be doing that for subs that aren't. It seems pretty clear.

Amazon was brought up. Apple hosts the Kindle app, but not books bought through Amazon's store. That makes sense. The same will be true for subs. If Apple sells the sub, they will host it, if not, then they won't. It's not that difficult to understand.

Amazon, and others don't allow better deals than given in their store, so why should Apple? You have to answer that question. If everyone else is doing that, then Apple should be allowed to demand it as well, or theirs will always be the highest pricing.

There is no defense for this move. If you think it's a good idea or that it's justified, you are not seeing the whole picture. Apple is abusing its market position and it's not going to work out for them.

They claim there's choice, but developers can't link to their online store from within of the app. Nor can they offer a reduced rate on their website even though their costs are close to 30% lower (there are costs associated with processing your own subscriptions, but not 30%). If they are currently making less than 30% profit on their subscriptions, they have to either take a loss on their in-app subscriptions, abandon the app store, or raise prices everywhere.

As an iPhone owner, I hope they pull out. Apps are what make the iPhone, without them, the iPhone isn't dominant. Amazon, Hulu, Netflix, etc all leaving would be quite the humbling experience for Apple and they'd be forced to change their policies or lose customers. Apple's in app subscription services look pretty good, and Apple does deserve a cut from anyone who chooses to utilize them, but they should be a choice and the cut should be less than 30%.

My big beef is with services that span multiple platforms, not things like the iPad only Daily. If a service is usable on multiple platforms, how can Apple claim that they deserve 30% of the subscription fee when there's no guarantee that an iOS device is even used to access that service 30% of the time.

When you buy a book from Amazon the book is hosted on Amazon servers. When you buy a book through in app App Store, Apple only processes the payment, the book is also hosted on Amazon. Apple ONLY processes the payment, they don't host the content, they don't distribute the content, they only take the 30% cut.

Quote:

Originally Posted by Gwydion

Apple is NOT hosting any data.

False, Apple hosts the free app. So Apple's cut has been 30% of 0.

Now Apple's cut is 30% of in-app subscription purchases which seems fair given you can still buy the subscription outside the app.

For books both the Kindle and Nook apps are free and direct competitors with iBooks. Amazon has or had a no-lower-price policy as well. But they aren't subscriptions anyway.

I guess I'm a bit tainted as a shareholder. Anytime I see Apple doing well to make a profit, I'm good, and if they have the market power to outgun Amazon, Sony or whoever, well, then more power to them. They've earned it..

As a shareholder you should worry. Amazon has their own storefront and only uses Apple to distribute the app. If Apple takes too big of cut then Amazon will move. Likely others will follow suit or not go with Apple to being with. With a "sort of" alternative like android being available it could be the start of an avalanche. Apple needs to tread carefully here as there is a real risk that their whole ecosystem could collapse. I would not like that to happen but I am concerned.

Agreed! After having had success in the entertainment/arts field in conjunction with new media, I entered into the consulting world a little over a year ago. I've worked with many successful retail stores, some who have margins that range anywhere from 40-55%.

To someone who doesn't understand anything about business, this goes through their mind:

"OMG! What a rip off!! That's disgusting how much they mark up!!!!"

To someone who DOES understand how business works, this goes through their mind:

The iPad is not a retail store. Amazon, Kindle etc. have their own store. Its not like this hasnt been pointed out about a dozen times already. ( This forum needs to be moderated so that people with some comprehension skills are allowed to post).

Apple is basically acting as a rentier here.

in any case being a consultant in Alabama for shit kicker LTD is not the same as running Amazon. Or Sony. Who have already pulled out. Or Skype, who will. Or Amazon, who will.Or all the other content providers who will. Or the European publishers who say they will, and are bringing a court case. They probably know their model better than you.

For $9.99 ebook Amazon will take $7 after Apple's cut. Amazon will end up with $2.10 (vs $2.99 for purchases directly through Amazon) and the publishers will get $4.90 (vs $7.00). The cost of maintenance and production is the same whether you sell one book or 1 million book. However, selling X + Y number of ebooks is better than selling X along even if the revenues from Y is 30% less. Business decisions are and should not be based on emotions.

Kind of best to just ignore asdasd. They think the world is plug and play in their own version. The last time I looked there was no governing body that unifies all deals to make them equal. Businesses tend to make deals that benefit their companies and those benefits come in many shapes and forms. itunes has been great for the music and film industry and I am sure the publishing industry is going to greatly benefit by this as well. And if you do not like it then switch to a different platform, it is as simple as that.

Agreed! After having had success in the entertainment/arts field in conjunction with new media, I entered into the consulting world a little over a year ago. I've worked with many successful retail stores, some who have margins that range anywhere from 40-55%.

To someone who doesn't understand anything about business, this goes through their mind:

"OMG! What a rip off!! That's disgusting how much they mark up!!!!"

To someone who DOES understand how business works, this goes through their mind:

I have an idea, why not let Microsoft charge one percent of the total amount of every invoice written with Word? Or rather written on a Windows PC. That would be a huge untapped revenue pool for Microsoft.

I hope you're being sarcastic. Microsoft is already getting paid for every invoice you write up in Word. You've paid them for that privilege up front, even if you never use the product.

What you're really saying is that Apple should charge for iTunes up front, say, at least as much as Word costs.